Corporate Sustainability Reporting Directive (CSRD)

The Corporate Sustainability Reporting Directive, also widely known as the CSRD, is one of the most ground-breaking reporting directives in the EU. As the successor of the Non-Financial Reporting Directive (NFRD), it aims to increase transparency on sustainability information. Although in the same spirit as the NFRD, the CSRD is much broader in scope and more prescriptive, creating detailed regulations and intending to make companies more sustainable over time. The directive is part of the European Green Deal, a package of several sustainability policies with the ultimate goal of Europe being the first continent to become climate-neutral by 2050.

What companies fall in scope of the CSRD

CSRD is the new standard for sustainability reporting for companies domiciled or operating in the EU. Any EU company that meets at least two of the requirements must comply with the CSRD:

• More than 250 employees
• Turnover of more than €40 million
• Balance sheet of more than €20 million

The CSRD scope will be extended to companies with the following requirements at a later date:

• Listed small and medium companies
• Non-EU based companies generating more than €150 million in revenues within the EU and at least one subsidiary or branch in the EU

CSRD Timeline

Since the development of the CSRD, a lot has happened. In the timeline below it shows the steps that have already been taken, and what steps you can expect in the future. The EU Commission has developed the CSRD and requested the EFRAG to advise on the Directive and create the ESRS (European Sustainability Reporting Standards). Currently, the final Directive and first set of standards are available, making it possible to align your company’s sustainability report with CSRD.

Our approach to the CSRD

ERM can detail the steps needed to comply. ERM works with clients to understand their business and forms customized approaches to CSRD requirements.

• Facilitating workshops to help you understand not only the framework, but also which aspects are relevant to your organization
• Performing gap assessments on your reporting maturity and current disclosures
• Conducting the double materiality analysis forming the basis of CSRD disclosures and enabling insights for your business strategy
• Defining an action plan for your organization to become CSRD-ready
• Closing gaps across strategy, programs, processes, and governance to make sure you have something good to report on